DENVER – A legislative effort to curb construction-defect lawsuits in Colorado passed its first test Wednesday after a Senate committee backed the measure.
The Senate Business, Labor and Technology Committee supported the bipartisan legislation after a seven-hour hearing by a vote of 6-2. The measure now heads to the full Senate for debate.
The proposed bill would require mediation or arbitration before a lawsuit is filed. It also would require a majority of homeowners in a homeowners’ association to agree to a lawsuit before one is filed.
Other provisions would require notices to homeowners of disputes and consequences related to proposed construction-defect lawsuits.
Lawmakers backed a handful of amendments that aim to offer additional rights to homeowners, including outlining how to fairly choose arbitrators and prepare notices.
Sponsors say the measure will spur affordable-housing development. Developers say threats of lawsuits are a large factor why they are not building many condos and townhomes in Colorado.
“Middle-class families, working-class people, are being squeezed out because the cost of housing is out of reach for so many,” said Sen. Jessie Ulibarri, D-Westminster, who is sponsoring the bipartisan bill along with Sen. Mark Scheffel, R-Parker.
The vacancy rate in Durango is 2 percent. Since 2010 rental costs in Durango have increased more than 10 percent annually. With the city growing by as much as 4 percent every year, Durango will need about 900 additional housing units within the next eight years.
Mayors and county commissioners testified in favor of the bill, suggesting that the future of their communities depend on it.
“Here in Denver we are not seeing this market grow like we would hope,” said Denver Mayor Michael Hancock. “Even with the increased pace of development ... condo development is still dramatically below pre-recession levels.”
But homeowners spoke of nightmares they experienced as a result of shoddy construction. They had the support of Democratic Sens. Irene Aguilar of Denver and Rollie Heath of Boulder.
“Nobody wants to get involved in a construction-defect case, and nothing in this legislation that I can see addresses the problem of substandard construction,” Jon Harris, leader of the Build Our Homes Right Coalition, said to applause. “If you build quality, be proud of it, and stand behind your product.”
pmarcus@durangoherald.com
